We refer to the letter issued by PQS Setia Konsult dated 30 November 2018 and the recent tender

interview.

Having attended the tender interview and after having read the above letter, we forward our
comments as follows for your guidance and considered reply to the project owners.

a) In principle we have no objection on our end in giving the bills of quantities which we have
prepared in detail and submitted to you. Nevertheless, we find it rather unusual for the
client to request it for evaluation at this juncture. A very detailed cost breakdown according
to the various buildings has been submitted to the client at the closing of the tender, which
ought to be reasonably sufficient for any evaluation.
b) In our professional opinion, the bills of quantities contains extremely detailed quantities and
sensitive cost breakdowns and should not be revealed at this juncture to anyone as it could
be used as a basis to get offers from others without your prior knowledge and could work
against your company’s interest. Furthermore, the detailed cost information is highly and
commercially sensitive and is a private document prepared exclusively for your private use
and commercial decisions.
c) Under the normal design and build tender requirements, bills of quantities and detailed
price and cost breakdown revelations are only made upon the successful award of the
contract and for the sole purpose of rationalisation of the contract sum and progress
payment certifications only and none other. It cannot and should not form part of the
contract. Under the ordinance of the design and build contract, the bills of quantities is
strictly a private and confidential document unless the contract is officially accepted by the
client and even then the conditions aforementioned applies strictly.
d) Hence, it is our considered opinion that you should inform the client that sufficient cost
breakdowns has been provided and further cost breakdowns and bills of quantities will be
submitted upon successful award of the contract and again the terms and conditions
pertaining to the contractual use of the bills of quantities as aforementioned shall apply in
all circumstances throughout the contract and under no circumstances the bills of quantities
shall form part of the contract other than for the purposes clearly mentioned above.
e) It is a proposition that is clearly too risky commercially for you to comply at this juncture,
nevertheless we leave the final decision to you.

Item 1.2 Value Engineering

a) We are perplexed after reading paragraph 1.2 of the above letter and are of the view that
the client’s consultants are mixed up in their approach. In the tender interview they used
the term value engineering for the use and adaptation of structural drawings designed and
prepared by their consultant engineers in lieu. However, in their letter above they have
mentioned again value engineering but this time they have requested it for comparison
purposes.
b) Several issues have been noticed in the drawings issued by them under the guise of value
engineering. Firstly, we notice that there is nothing to relate as value engineering except
that the design is prepared by them and to make matters worsts the structural design for
Cineplex is not buildable with a reinforced concrete roof as this will require columns which
will be in the middle of the cinema. Furthermore, a transfer level will required at the ground
level to ensure it is not in the way of driveways and carpark. Surely, under the circumstances
the drawings issued by them cannot be considered in anyway near to the meaning of value
engineering and this becomes even more glaring as we notice that additional mezzanine
floor has been added.
c) Under the above circumstances which involves un-economical designs, addition of
mezzanine floor and changes which will affect almost all elements of the shopping mall and
foundations, we cannot comprehend the term value engineering. In the short period of time
given and vague requirements, we do not see how this requirement can be fulfilled on a fair
and economical basis for both contractual parties.
d) In our opinion, they should provide comprehensive and new bills of quantities reflecting the
above works for your pricing and the tender should not be referred to as “Design and build”.
It should be the conventional contract with bills of quantities prepared by the client’s
consultants.
e) Accepting their design is not the right thing to do in the circumstances and it is detrimental
to your interest and invites un-wanted risks financially and contractually.
f) It should also be highlighted to the client that the tender submitted is consistent with the
tender drawings issued in which there is NO indication and requirement for a mezzanine
floor. Furthermore, the cost for providing the concrete flat roof will be too prohibitive if so
desired.
g) Their request clearly appears to be much skewed contractually and is financially and
contractually too risky. It would appear to us that that the clients consultants are
misdirected in their procurement strategy and implementation and will only cause you
contractual problems in the future.

PROVISIONAL SUMS.

From the list given there appears to be far too many provisional sums are requested to be
allocated. There is no clear indication if these works are required to be carried out under
direct contract by the client or to be implemented under nominated sub-contracts or the
design and build contractor. These works cannot be done in isolation or after the main
contract is completed and runs contrary to the design and build contract.

Under the design and built contract the contractor is equally responsible for allocation of
provisional sums and if in the later stages found to be insufficient, the contractor will be
contractually held responsible. Hence, we would advise you to make it clear that you are to
be paid for the sums exceeding the provisions made. If the provisional sums expanded are
much lower than it shall be credited to the client’s account.
It would also be prudent for you to confirm that all ID works are under provisional sums as
per original requirements and these contractors to be employed after handing over of the
first phase of the contract as stipulated in the tender. If they are concurrently to be
employed or dovetailed into your programme of works then you must be entitled to profit
and attendance on such works.

Further, if at all you agree for nominated sub-contracts, please state the profit and
attendance sum required. However, we would advice you to refrain from this form of
contractual arrangements all other works except for the ID WORKS under the design and
built contract. It must be also made clear that any entailing builder’s work in respect of ID
WORKS will be treated as variation since their requirements are unknown at the point of
submitting the tender.

M&E ITEMS

Submitting the brands for m&e works at this preliminary stage is not advisable and would
advice you to simply state that your tender is in compliance with the tender document
issued.

Cost breakdowns on M&E works similary should only be revealed when the award is made
on the same premise of the main building works.

Some of the works requested under the mechanical and electrical works appear to be new
requirements and kindly request the relevant consultant to provide you the costings. Kindly
do remember to include the profit margin for main contractor. Please also take note of the
glass lift requested which may entail free standing steel structure which can be very
expensive. Kindly request the M&E engineer to include this cost.

In our opinion, the technical literatures, schematic drawings, detailed cost breakdowns and
the like should only be given when the award or acceptance is confirmed. It is also advisable
that you indicate to the client that a series of meetings are required to establish the final
and actual requirements before accepting the tender. This is simply because the
requirements and the tender drawings and the client’s requirement are too vague at this
juncture.
On the clarifications required by the client’s consultants during the first tender interview,
our answers are as follows:-

Curtain Wall cost for office towers are low- Our answer to this is that, part of glazing works
at this area is included in the shopping mall cost and hence, cost for the office tower glazing
work is sufficiently provided, there is no error or under provision in this respect.

Earthworks too little – Our answer to this is that, the earthworks referred to is the basement
excavation and accordingly this work is accounted for in the basement works and includes
the export of the surplus excavated material.

Identify the works under Sundries- The works under the sundries element includes
a) Under Basement Works Bills – it includes:-
1) Epoxy paint car park lines, numbers, edgelines and directional on floor arrows.
2) Wheel stoppers.
3) Service room kerbs.
4) Service and handicap ramps
5) Column guards
6) Bollards
7) Lift hoist beams and jamb infills

b) Under Shopping Mall Bills – it includes:-

1) Epoxy paint car park lines, numbers, pedestrian crossings and handicap car park.
2) Stainless steel letter boxes
3) Toilet Cubicles
4) Powder coated aluminium screens.
5) Powder coated vertical aluminium screens enveloping Cineplex.
6) Glass railings
7) Service and handicap ramps.
8) Services room kerbs.
9) Column guards.
10) Counter tops.
11) WC Ledges.

c) Boutique Hotel
1) Decorative mild steel balcony railings
2) Counter tops
3) Frameless shower screens
4) WC ledge
5) Lift hoist beams and jamb infills
6) Steel bridges.
 d) Commercial Suites & Apartment
1) Toilet Cubicles
2) Stainless steel letter boxes.
3) Glass railings.
4) Powder coated aluminium screens.
5) Powder coated aluminium & mild steel section roof screen.
6) Powder coated vertical aluminium screens.
7) Services room kerbs.
8) Frameless shower screens
9) Counter tops.
10) WC Ledges.
11) Lift hoist beams and jamb infills.

e) Office Blocks
1) Counter tops
2) Mirrors
3) WC Ledges
4) Services room kerbs.
5) Ablution kerbs
6) Stainless steel letter boxes.
7) Toilet Cubicles.
8) Powder coated aluminium screens.
9) Powder coated aluminium roof screens.

On the question of what is included in consultants’ fee – The answer is that it includes the
professional fee for:-

a) Architect.
b) Planner.
c) Landscape Architect.
d) Quantity Surveyor
e) Civil Engineer.
f) Structural Engineer.
g) Mechanical & Electrical Engineers.
h) Sales and Services Tax of 6%.
i) Stamping Fee for Memorandum of Agreement.

On the question of advance payment bond premium – We believe the client’s consultants have mis-
read the document. The premium included is for performance bond only. You may want to change
to company guarantee as discussed.

On the issue of completion period/phasing – Kindly re-state that phase 1 of the works includes the
completion of the piling, basement, hotel and shopping mall/Cineplex and excludes ID WORKS (36
months) and the phase two of the works is 12 months thereafter for the completion of Commercial
Suites.
We hope the provides the technical and contractual answers to the questions raised via the
interview and the above referred letter.